Prop firm challenges: how many of you failed because of the loss limits? - page 3

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Amedeo, that was one month, so the question is fair. I did run the long history afterwards on the six older setups across the same four indices, 11.4 years and about 66,500 trades. The worst single day in all of it was minus 17.4 R, so that August day was about as bad as a day got in eleven years. The overall limit was the harder constraint. Three quiet years from 2015 to 2017 produced a drawdown of 449 R without one terrible day in it, just a slow grind, and to keep the whole period inside 10 percent the raw book without any scaling would have needed about 0.07 percent per trade. So for me the worst day sets the daily cap and the grind sets the size. I also trust that long run less than the month, because my old backtest engine later turned out to book profits even on random data, which makes its drawdowns look smaller than they were. I never measured the correlation on red days separately, but the red days I checked were red almost everywhere at once, which fits what you say.

Wasun Angkanapanit #:
Interesting question. From what I've seen while building and testing EAs, most "rule" failures aren't caused by a bad strategy. They're caused by position sizing that doesn't account for the worst case.
Typical patterns:
Several trades hit SL on the same day. Each trade risked 1%, but 4–5 correlated positions were open at once, so the real exposure was 4–5%.
Floating loss counts, not just closed loss. Many firms measure daily drawdown on equity. A trade that would have recovered still breaks the rule at its worst point.
Reset time confusion. The firm's day resets on its server time, not your local time.
Revenge trading after a loss. Trying to win the day back near the limit.
What would help most, in my opinion, in this order:
Smaller and capped size. Before every trade, check: if everything open hits SL right now, am I still under the daily limit with a buffer? If not, skip the trade.
A hard stop, not just an alert. An alert is easy to ignore in the moment. A tool that closes everything and blocks new trades at about 70–80% of the limit removes the decision.
A fixed routine. A set number of trades or a set risk per day, and stop after X losses.
Clearer rules from firms would help too, but you can't control that, and the three points above you can.
Curious whether others found the same: was it one big loss, or several small ones adding up on the same day?
I agree, correlated positions and floating losses can catch traders off guard. I’d rather use smaller position sizes and leave a buffer than risk the account trying to recover a loss. With Hola Prime, understanding the specific drawdown rules and reset times is just as important as having a good strategy.
Youness Kanbaou #:

Chris, with a grid the rollover spike hits every open level at the same second. A quick number before midnight: total open lots × usual spread widening in points × point value. Does your grid keep adding levels during that spike, or does it have a time filter?

Muhammad, logging the reason separately from the result is a great habit. That list usually shows the problem faster than the equity curve.
@Youness Kanbaou

no time filter, but the grid can't keep adding forever. It has a fixed max number of levels for each strategy and pair. So a filter would only stop a new level from opening at a bad price. The levels that are already open get the spike anyway.

For me the useful number is your formula with the worst case, all levels open at midnight. Because the max is fixed, i can work that out before, not after. And to be fair, my bad day was the gap, not the rollover. But both hit the same thing, everything that is open at that moment.

Best regards
Chris
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